In the Final Economic Analysis, OSHA addresses the significant
issues related to technological and economic feasibility and small
business impacts raised in the rulemaking process. This analysis also
explains in detail the Agency's findings and conclusions concerning
pre-standard (baseline) conditions, such as respirator program
practices, in establishments in the regulated community, and discusses
how and why the requirements of the standard are expected to reduce
employee exposures. The preamble to the revised rule and the Final
Economic Analysis are integrally related and together present the
fullest statement of OSHA's reasoning concerning this standard. The
Final Economic Analysis has been placed in the rulemaking docket.

This analysis of OSHA's revised Respiratory Protection standard (29
CFR 1910.134) has been conducted in accordance with Executive Orders
(EOs) 12866 and 12875, the Regulatory Flexibility Act (as amended in
1996), the Small Business Regulatory Enforcement Fairness Act (SBREFA),
the Unfunded Mandates Reform Act (UMRA) and the Occupational Safety and
Health Act. The standard is a "significant" rule as defined by EO
12866, a "major" rule as defined by Sec. 804 of SBREFA, and a
"significant" rule as defined by UMRA.

The purposes of this Final Economic Analysis are to:

Describe the need for a revised standard governing the use
of respirators;

,

Identify the establishments, industries and employees
potentially affected by the standard;

Evaluate the costs, benefits, economic impacts and small
business impacts of the standard on affected firms;

Assess the technological and economic feasibility of the
standard for affected establishments, industries, and small businesses;
and

Identify the availability of effective non-regulatory and
alternative regulatory approaches.

OSHA's final Respiratory Protection standard covers the use of
respiratory protection in general industry, construction and shipyard
employment, as well as marine terminals and longshoring. In all, about
5 million employees are estimated to use respirators. 1 Workers use
respirators to protect themselves from a wide variety of occupational
exposures. Respirators are used, at least to some extent, in virtually
every industry, although the extent of respirator use varies by
industry. Manufacturing and construction have relatively heavy
respirator use; in contrast, use in many service industries is very
limited.

Chapter II of the economic analysis describes the pattern of
respirator use within each affected industry. To develop this profile,
the Agency analyzed the results of several OSHA-sponsored nationwide
surveys. The results of OSHA's analysis appear in Table VI-1. The
Agency estimates that approximately five percent of workers wear
respirators at some time, and that approximately 1.3 million
establishments, or about 20 percent of all establishments, have
employees who use respirators. Approximately 900,000 of these
establishments are very small, i.e., have fewer than 20 employees. For
a discussion of the number of firms identified by the Small Business
Administration (SBA) as small, see Chapter V.

The new standard is programmatic in nature, reflects current
practice at many facilities, and does not require the use of new
technology. Thus, OSHA finds that the standard is clearly
technologically feasible for affected firms of all sizes.

The benefits that will accrue to respirator users and their
employers are substantial and take a number of forms. Chapter IV of the
analysis describes these benefits, both in quantitative and qualitative
forms. The standard will benefit workers by reducing their exposures to
respiratory hazards. Improved respirator selection procedures, better
fit test procedures, and improved training, all areas strengthened by
the revised standard, will contribute substantially to greater worker
protection. Estimates of the benefits of the standard are complicated
by uncertainties about the effectiveness of the standard and the number
of covered work-related illnesses. The Agency estimates that the
standard will avert between 843 and 9,282 work-related injuries and
illnesses annually, with a best estimate (expected value) 2
of 4,046 averted illnesses and injuries annually. In addition, the
standard is estimated to prevent between 351 and 1,626 deaths annually
from cancer and many other chronic diseases, including cardiovascular
disease, with a best estimate (expected value) of 932 averted deaths
from these causes.3

The annual costs employers in the affected establishments are
estimated to incur to comply with the revised respirator standard total
$111 million.4 These costs, which are presented in detail in
Chapter III of the full economic analysis, are annualized over a 10-year
horizon at a discount rate of 7 percent; Table VI-2 shows
annualized costs by provision of the standard. The most costly
provisions are those requiring annual fit testing of respirators and
annual refresher training. These two provisions together account for
approximately 90 percent of the standard's compliance costs. As a rule,
costs are largely determined by the extensiveness of respirator use in
affected establishments. This analysis did not attempt to factor in the
offsetting value of cost savings from regulatory changes, such as
dropping the existing standard's prohibition against contact lens use,
providing for greater uniformity for substance-specific health standard
respirator provisions, or allowing employers to use licensed health
care providers in addition to physicians to perform medical
evaluations.

Chapter V of the economic analysis analyzes the impact of these
compliance costs on establishments in affected industries. The standard
is clearly economically feasible: the cost in the average affected
establishment is 0.002 percent of sales and 0.03 percent of profits; in
the most heavily impacted industry -- business services, SIC 73 --
annualized compliance costs amount to only 0.1 percent of estimated
sales and 1.22 percent of profits. In the next most heavily impacted
industry -- Special Trade Contractors, SIC 17 -- costs amount only to 0.02
percent of sales and 0.46 percent of profits. These results are shown
in Table VI-3.

In the Preliminary Regulatory Impact Analysis developed in support
of OSHA's 1994 Respiratory Protection proposal [Ex. 57], the Agency
examined the impact of the proposal on different sizes of
establishments. Based on that analysis, the Agency certified that the
proposed standard would not have a significant economic impact on a
substantial number of small entities. Upon review of comments and other
data submitted to the record of this rulemaking, the Agency has
analyzed the final rule's impact on small entities, as defined by the
Small Business Administration (SBA) and in accordance with the
Regulatory Flexibility Act. In addition, in order to ensure that even
the smallest entities are not significantly impacted, the Agency
performed an analysis of impacts on the smallest establishments, i.e.,
those with fewer than 20 employees.

The impacts of the standard on sales and profits did not exceed 1
percent for small firms in any covered industry, whether the analysis
used the SBA's definitions or the fewer-than-20-employee size class
definition. Because the incremental costs of the final rule are
primarily related to the number of respirator users per establishment
and because small entities do not have a higher percentage of
respirator users than large establishments, the standard does not have
a differential impact on small entities. If the costs of compliance
were influenced by economies of scale, such effects would have been
demonstrated by OSHA's analysis of the smallest firms, i.e., those with
fewer than 20 employees. However, no such effects were seen, even among
firms in this smallest size-class. Therefore, the Agency has no reason
to believe that establishments or firms in intermediate size groupings,
i.e., those in the range between 20 employees and the employment size
cutoff for the applicable SBA definition, would experience larger
impacts. Finding this, the Agency certifies that the final Respiratory
Protection standard will not have a significant adverse economic impact
on a substantial number of small entities. The results of OSHA's
analysis of small business impacts on firms 5 within the
SBA's size classifications are shown in Table VI-4.

Unfunded Mandates Analysis

The final Respiratory Protection standard has been reviewed by OSHA
in accordance with the Unfunded Mandates Reform Act of 1995 (UMRA) (2
USC 1501 et seq.) and Executive Order 12875. As discussed in Chapter V,
OSHA estimates that compliance with the revised Respiratory Protection
standard will require expenditures of more than $100 million each year
by employers in the private sector. Therefore, the Respiratory
Protection final rule establishes a Federal private sector mandate and
is a significant regulatory action within the meaning of Section 202 of
UMRA (2 U.S.C. 1532). OSHA has included this statement to address the
anticipated effects of the final rule pursuant to Section 202.

OSHA standards do not apply to state and local governments except
in states that have voluntarily elected to adopt an OSHA State plan and
have then adopted the specific standard in question or one that has
been deemed by OSHA to be equally effective. Consequently, the
Respiratory Protection standard does not impose a "federal
intergovernmental mandate" as defined by Section 421(5) of UMRA (2 USC
658 (5)). The revised Respiratory Protection standard therefore does
not impose an unfunded mandate on state and local governments.

Further, OSHA has found that the costs incurred by state and local
governments in those states that choose to adopt the standard will be
small compared to corresponding state and local government
expenditures. If State-plan states adopt the standard, the greatest
impact in some states would be on public fire departments. Bureau of
the Census data on the amount of revenue dedicated to fire protection
by local governments indicate that $14.4 billion was spent on this
service in 1992, the latest year for which such data are available
[Government Finances]. NFPA data indicate that 75.3 percent of the U.S.
population is served by fire departments that employ at least some
career firemen [NFPA, p. 15]. This means that approximately 37.7
percent of the population (approximately half of all state and local
government employees work in State-plan states) is served by at least
partly career fire departments in State-plan states. Assuming the
expenditures for fire protection are spread fairly evenly across the
population, approximately $5.3 billion is spent on fire protection
annually by affected fire departments. As indicated in the cost
analysis (see Table VI-2), the total annual cost of the standard for
public fire departments in State-plan states is approximately $3.5
million, which means that the costs of compliance constitute less than
0.1 percent of the revenue devoted by these states to fire protection.
Costs of this magnitude are clearly an insignificant portion of the
total fire protection budget.

The remainder of this section summarizes OSHA's findings, as
required by Section 202 of UMRA (2 USC 1532):

This standard is issued under Section 6(b) of the OSH Act.

This standard has annualized costs estimated at $111 million,
primarily in the private sector, and is estimated to save hundreds of
lives per year from cancer and cardiovascular disease. Compliance will
also prevent thousands of illnesses annually that would have been
caused by acute and chronic overexposures. The standard will impose no
more than minimal costs on state, local or tribal governments,
substantially less than $100 million. OSHA pays 50 percent of State
plan costs, although the Agency does not provide funding for state,
local or tribal governments to comply with its rules as employers.

OSHA does not anticipate any disproportionate budgetary effects
upon any particular region of the nation or particular state, local, or
tribal governments, or urban or rural or other types of communities.
The principal costs of this standard are to control worker exposures
associated with programmatic provisions such as annual fit testing and
training, activities that are engaged in by thousands of establishments
in hundreds of SIC codes that are widely distributed throughout the
country. Chapters III and V have provided detailed analyses of the
costs and impacts of the standard on particular segments of the private
sector. OSHA has analyzed the economic impacts of the standard on the
industries affected and found that compliance costs are no more than
0.1 percent of sales for establishments in any industry, and
consequently that no plant closures or job losses are anticipated in
the affected industries. As a result, impacts on the national economy
would be too small to be measurable by economic models.

Pursuant to Section 205 of the UMRA (2 USC 1535), after having
considered a variety of alternatives outlined in the Preamble and in
the Regulatory Flexibility Analysis, the Agency has concluded that the
final rule is the most cost-effective alternative for implementation of
OSHA's statutory objective of reducing significant risk to the extent
feasible.

Environmental Impact Analysis

The final Respiratory Protection standard has been reviewed in
accordance with the requirements of the National Environmental Policy
Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.), the regulations of the
Council of Environmental Quality (CEQ) (40 CFR part 1500), and DOL NEPA
procedures (29 CFR part 11). As a result of this review, OSHA has
concluded that the rule will have no significant environmental impact.

References

Bureau of the Census, Government Finances, Series GF, No. 5,
annual, as reported in the Statistical Abstract of the United
States, 1995. GPO, 1995.

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